What you need to know about investing in hospital stocks
In April, yours truly wrote about the benefits of being a stockholder in a hospital, like free room rates and huge discounts on professional and procedure fees, among others. (READ: Invest in hospital stocks)
It is a very cost-effective approach, most especially if you are looking at long-term care. Moreover, the benefit extends to the parents, spouse, and children. With the ever-increasing cost of medical services, getting hold of an investment like hospital stocks would provide protection against inflation.
Recently, I spoke to an insurance agent about these benefits and, to my surprise, he found such attractive. I always thought that health insurances would be the thing for him, given the nature of his work. But then again, he ran me an estimate of the health insurance cost for him and his family.
He said, it would take at least P50,000 ($1,110.62) per person in his family per year to avail of a good health insurance. Multiply that by 4 for his spouse and parents alone that would already cost P200,000 ($4,442.47) per year.
But with a one-time payment of approximately P250,000 ($5,553.09) for a hospital stock that would include all the beneficiaries and benefits, it is already a great bargain.
Which hospitals offer stocks?
Currently, Makati Medical Center (MMC), The Medical City (TMC), and the United Doctors Services Corporation (UDSC) are allowed by the Securities and Exchange Commission (SEC) to sell shares to the public.
Stocks from these hospitals though might be pricey.
Makati Medical Center stocks, for instance, is at P1,635 ($36.31) per share, with a unique benefits’ package. Investors that have less than 600 shares, for example, are entitled to 10% discount on hospital bills, excluding medicine, supplies, and professional fee.
Investors with 600 or more shares, for instance, get 20% discount on the same items. This means, though, that for one to get the 20% tier discount, an investor would have to shell out P981,000 ($21,789.62) for MMC.
Share prices can be requested through the TMC Corporate Services or UDSC’s Legal Department.
Should an investor, however, find these hospitals a bit pricey, he or she can also ask other hospitals nearby.
If a hospital is not licensed to sell shares to the public, check if there are existing investors selling their holdings. Usually it is the finance or investor relations department that have information regarding this matter.
But whatever the case may be, it is best to be prudent with one’s investments.
Before buying, it is best to check with SEC if a hospital is registered. If it is actively selling its shares to the public, also check if it has secured a secondary license (with the SEC) to undertake such.
For instance, around 2013, two hospitals – Diliman Doctors Hospital and Pacific Global Medical Center – received a cease and desist order from the SEC. They were actively selling shares of stock to the public without prior authorization from the regulator.
This should not, however, be misconstrued that hospitals cannot have investors through stock offerings. Certain requirements should be met first before doing so.
As of this writing, the hospitals aforementioned are still not in the list of hospitals that can actively sell shares to the public.
Apart from checking with the SEC, also request a copy of the prospectus, so you will be familiar with its corporate governance, risk management, as well as where the investment goes.
Moreover, also check the benefits package offered, as these vary per hospital.
As with all financial products, it is recommended to study first and invest with a specific goal in mind.
Legal and specialized financial experts can help in this regard to integrate it with your overall financial plan.
$1 = P45.02